11.13.2001
Spot price flying high

• 128M SDRAM spot price shot up 32.4% over the past 7 trading days in North America with the Taipei market jumping 11%. The rally is largely due a halt in Hynix’s dumping of DRAM as both Micron and Samsung may file complaints to the WTO about the Korean govt’s involvement in bailing out the battered chipmaker. Additionally, Micron and Samsung will attempt to sell their own stock of DRAM at a higher spot price but will stop shipping if prices turn unsatisfactory. We believe this move has positive implications for the sector. However, the contract price for DRAM remains unchanged at this juncture. The price rebound is partly due to expectations of a cutback in supply and evidence by major players of rationalizing the marketplace, as well as overly depressed pricing (under US$1). We believe the rally will improve current sentiment for Taiwan DRAM players.